How Lenders Can Manage Margins Effectively in the Time of Covid 19

Refi volumes are high at $306b in Q1 with a projected $458b in refi origination going into Q2.

Household debt is increasing, as is mortgage debt.

Prime is 40 bps lower than the average 30 year mortgage.

The fed is buying unlimited bonds. The spread is at a record high.

Covid 19 has changed everything in our industry – specifically for lenders right now. But you know that. Beyond the basic everyday chaos financial institutions are experiencing, we even have to question what happened weeks ago. For instance, the credit changes going on due to Covid has easily taken loans that previously looked good ago and ha turned them upside down. How do you know what to do? How do you decipher? Should you be tightening rates? In a sea of volume, which loans do you go with to be profitable?

With so many inconsistent variables, we have to focus and make decisions based on what’s real – the data. I jumped into some of our Nomis proprietary data to show you areas to focus on and things to think about as you are trying to figure out how to manage your volume.